Have you ever wondered why there is a very positive opinion – across Europe and around the world – of the German startup development market? It is often said that Germany is at the heart of the development of innovative businesses, and I must admit that this caught my attention. When looking at the subject a little deeper, we can see many factors that stimulate the growth of the startup ecosystem in Germany.
Startups like the German market. But why?
Simply put, the startup ecosystem in Germany is well organized, which makes it easier to found and build innovative companies. The German market offers favorable launch infrastructure, good facilities and many options for funding. At one time, Germany was famous for powerful corporations and a well-developing environment for small- and medium-sized enterprises, but startups were not as prominent as they are now.
Investment in startups in Germany is growing every year. Let’s look at this interesting statistic. In 2015, almost EUR 3.1 billion was invested in German startups – this is almost twice as much as in 2014 and five times more than in 2013. The sum of investments is constantly growing and investors tend to place their resources in tech startups.
The German market is also famous for good conditions for international companies whose ambitions for promoting their products go far beyond just the local market. I attended a conference on startups in Berlin, and one of the speakers said very wise words that I remember to this day. In his opinion, one of the most important features that distinguishes German startups from others are innovative business models and non-standard products that are in high demand on the market. Do you agree? I definitely do.
Let’s look at another statistic. It turns out that more than 10 percent of the CEOs of startups in Germany come from abroad, and one-fifth of employees is foreign. The latest trends on the local market are Proptech and Greentech startups. Really curious.
I mentioned earlier about favorable conditions in terms of obtaining funding. Why is this so? If we thoroughly analyze the German ecosystem, we notice a lot of organizations or investors that have a wide offer for startups. I want to draw your attention to Rocket Internet and the German Startups Group. Rocket Internet is listed on the stock exchange and belongs to one of the main investors in Germany. The company has shares in many promising startups. The German Startups group, which is a Berlin-based investment company and a venture capital provider for Germany’s flourishing startup scene, finances young company growth and also supports their set-up, providing them with business expertise.
Pay attention to one more fact. Germany is in a good geographical and geopolitical position in the center of Europe, which greatly facilitates movement and communication with other countries. It is also worth taking into account the stability of the local economy, which is not without significance for startups and potential investors. According to NimbleFins, Germany was ranked in first place in the ‘Best European Countries for Startups 2019’ analysis. The United Kingdom was in second place and Ireland third.
Most promising startups to remember for you
If you are interested in topics related to startups, then here are some that you should know about. I have prepared a short list of German startups that are on a great development path and it is worth monitoring their progress.
FOODBOOM. Europe’s first premium food network. FOODBOOM develops content in its own studios and distributes it over a variety of channels. It reaches an audience of over 8 million people per week via social media, its own website, and the FOODBOOM app.
Phrase.com. A translation management solution for web and mobile applications. Collaborate with your team, find professional translators and stay on top of the process.
heycater! A marketplace for ordering quality business catering online. The company can help you organize delicious food for your team by connecting you with outstanding local caterers.
e-bot7. Integrates an AI layer into existing or custom CRM systems to increase the efficiency of customer service operations. This reduces average handling time by up to 50 percent and automates repetitive and recurring questions.
Hausgold. A modern platform for the sale of real estate. With help from Hausgold you can sell your apartment cheaply, safely and comfortably, in three easy steps.
finreach solutions. A SaaS API platform enabling partners to build impactful financial products, across Europe. With the fintech innovation challengers, finreach solutions develops B2B2C plug-n-play solutions, and microservices architecture enables their business clients to have best-in-class interfaces and reduced back-end complexity.
LoanLink. A rapidly growing startup reinventing the home buying experience in Germany by transforming an outdated and painful process with technology and innovation.
I am grateful for opportunity to share my point of view on the German startup market. I have no doubt that this is a great place for the development of innovative startups. If you want to talk to me about this topic, or have any questions, write to me in the contact form or find me on LinkedIn.